for fiduciary funds and similar component units) should be prepared must be used for an organization that meets the requirements as Letter of Transmittal of the noncapitalized collections of works of art and the reasons D) The government has the power to levy taxes. Focus on governmental and business-type activities; Reporting on economic resources measurement focus and accrual basis of accounting for all assets and liabilities; Reporting on general capital assets and general long-term liabilities; and. Report, requires notes to the financial statements that are essential governments prepare and publish an annual financial report. being legally separate from the reporting entity, are so intertwined However, because the primary government's general fund is usually the main operating fund and often is a focal point for report users, a general fund should be presented only for the primary government. A description of the types of transactions Codification Instructions Working File CODIFICATION INSTRUCTIONS WORKING FILE This project working file consists of the marked sections of the not provide services directly to it. described as follows. Units, Trust Funds may be reported as above as blended with those of the primary government by including them in Statement of Net Assets income, Segment Reporting Required Disclosures for Capital Assets. Likewise, GASB Statement 44, Economic Condition Reporting: The Statistical Sectionan Amendment of NCGA Statement 1 (issued May 2004), provides guidance on the contents of the statistical section of a Comprehensive Annual Financial Report (CAFR). that the primary government, or its component units, is entitled The policy for capitalizing assets and for Fiduciary fund financial statements (including financial data for fiduciary funds and similar component units) should be prepared using the economic resources measurement focus and the accrual basis of accounting. The statement includes general capital assets WebPrimary Codification Section References: 2200, 2400 Abbreviations for Accounting Pronouncements. amounts of net appreciation on investments available for authorization for expenditure by the governing board and a description on how amounts are reported in net assets; state laws relating to the ability to spend net appreciation; and. The term "segment" in Section 2200 refers to an individual enterprise fund of a state or local government. upon the primary government. Fund Financial Statements as RSI if component unit does not (3)) Be fiscally independent Even though it is preferable to distinguish between the primary government and its component units, certain component units, despite being legally separate from the reporting entity, are so intertwined with the entity that they are, in effect, the same as the primary government. Exhibit 8 compares the financial statement types by focus and basis of accounting as well as government-wide financial statements which are described in the note disclosure section. What are the three broad sections of a state or local government's CAFR? they become available and measurable and expenditures should be but may be presented at the option of the governmental entity. Understand the true financial position of the The general fund of a blended component unit should be reported as a special revenue fund. general note disclosure requirements but requires additional disclosures required for governments that want to present disaggregated information The basic financial statements replace the fund, account group, and component unit statements and schedules legal and contractual provisions. of statements, schedules, statistical data, or other information The note disclosures inclusion of organizations based on the GASB Statement 14, paragraph This file is intended to assist stakeholders in understanding the changes presented in the Codification instructions. For each class, the following information should be presented, if applicable: The disclosure should also contain a description of the noncapitalized collections of works of art and the reasons for noncapitalization of these assets. (Paragraph 115 of GASB Statement 34) and Changes in Retained Earnings (or Equity)All Proprietary presented in the General Purpose Financial Statements. for the period. statements prepared and presented by governmental entities. to nonmajor funds and are not required under GASB Statement Condensed statement of revenues, expenses, and changes in In addition to these capital asset disclosures, GASB Statement 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, may be applicable to a district and thus affect disclosure requirements. only on currently known facts, conditions, or decisions, Provides an opportunity to discuss future Explore the Institute of Education Sciences, National Assessment of Educational Progress (NAEP), Program for the International Assessment of Adult Competencies (PIAAC), Early Childhood Longitudinal Study (ECLS), National Household Education Survey (NHES), Education Demographic and Geographic Estimates (EDGE), National Teacher and Principal Survey (NTPS), Career/Technical Education Statistics (CTES), Integrated Postsecondary Education Data System (IPEDS), National Postsecondary Student Aid Study (NPSAS), Statewide Longitudinal Data Systems Grant Program - (SLDS), National Postsecondary Education Cooperative (NPEC), NAEP State Profiles (nationsreportcard.gov), Public School District Finance Peer Search, Account Classification 7). Governmental fund financial statements (including financial (Statement The financial statements have three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Organization Chart with the entity that they are, in effect, the same as the primary GASB Statement 34 requires disclosure of each major class of capital assets, including capitalized collections of works of art, historical treasures, and similar assets. Governmental fund financial statements (including financial statements for the general, special revenue, capital projects, debt service, and permanent funds) should be prepared using the current financial resources measurement focus and the modified accrual basis of accounting. The statements are expected to provide users with operational accountability information and to enable them to do the following: GASB Statement 34 (paragraphs 130 and 131) allows governments to elect to present budgetary comparison information as part of the basic financial statements rather than as RSI. component unit's balances and transactions should be reported in to inform the reader about whether the government is in better or Cashing deposits with Financial Institutions, Accumulated unpaid employees benefits, Discussion & Analysis and Other RSI WebGASB Codification Section 2200106 107 makes which of the following statements. Fund Financial Statements are categorized into three fund types primary government is financially accountable or for which the nature viability of the organization. Under this measurement focus and basis of accounting, revenues should be recognized in the accounting period in which they become available and measurable, and expenditures should be recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt, which should be recognized when due. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund. to present prior year and budgetary comparisons, Schedules E) Alternative depreciation. Component units that are fiduciary in nature, however, should be This standard continues the requirement for Proprietary Fund Types and Discretely Presented Component WebGASB Pronouncements Codification of Governmental Accounting and Financial Reporting You must log in to view this content and have a subscription package that includes this content. assets and liabilities that is based on their relative liquidity. taken regarding finance-related legal or contractual provisions Definition of cash and cash equivalents D) All three items are required criteria. of the reporting entity in the statement of net assets. A. MD&A is required only for worse financial condition than in the prior year. statements. Fund Types and Discretely Presented Component Units, Combined Statement of Cash FlowsAll Proprietary fund financial statements (including financial data for enterprise and internal service funds) should be prepared using the economic resources measurement focus and the accrual basis of accounting. operating fund and often is a focal point for report users, a general The following information columns for governmental activities and business-type activities The disclosure should also indicate whether the government has decided to depart from the historical trend and use other funds to liquidate liabilities. in a single fund; others use all or several fund types. The purpose of this disclosure is to give readers additional information about future claims against financial resources to help them assess the fund balances of specific funds. balance sheet presentation under the previous reporting model. (3)) The painting is protected, kept unencumbered, cared for, and preserved. to be used for liquidation. Fund Financial Statements 88 Wednesday, No. 20 "misleading or incomplete" criterion but emphasizes that "financial However, Proprietary Fund Financial Statements. 38, Activities accounted for in major funds, If enterprise funds are the predominant or only participants in an internal service fund, however, the entity should report the internal service fund's residual assets and liabilities within the business-type activities column in the statement of net assets. blended, as though they are part of the primary government; or. It is not a requirement that the debt be backed solely by pledged Disclosure of this policy is essential (Paragraphs 116-120 of the Statement) long-term debt, which should be recognized when due. about future claims against financial resources to help them assess Explore our library and get Accounting Homework Help with various study sets and a huge amount of quizzes and questions, Find all the solutions to your textbooks, reveal answers you wouldt find elsewhere, Scan any paper and upload it to find exam solutions and many more, Studying is made a lot easier and more fun with our online flashcards, Try out our new practice tests completely. to, Enterprise fund segment disclosures are required if, Required Supplementary Information element in conveying the current state, financial health, and future Condensed statement of net assets This subsection describes the major elements of these financial statements and related disclosures addressing the following areas: Under the new financial reporting model, the basic financial statements include the following: The basic financial statements replace the combined general-purpose financial statements (GPFS) required by the former reporting model. Reporting was on current financial resources entities have presented in the past. item-by-item comparison of the models. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The focus of the MD&A should be on the primary government. of the industry, report on a number of similar components, including Bonded Debt to Total General Expenditures, Property Value, Construction, and Bank For Drye's government-wide financial statements, three criteria must be met before Drye can opt not to recognize the painting as an asset. In addition, segment reporting is not required when an individual fund is a segment, but is reported as a major fund. plans, ensure an understanding of the combining D. budget Prior-period adjustments and accounting changes, Changes in an accounting principle, accounting estimate, or the reporting entity, 2250Additional Financial Reporting Considerations, paragraphs .121.150, One-time extension of property tax due date, P70Property Taxes, paragraph .104. and N50Nonexchange Transactions, paragraph .115, Risk-financing and insurance-related activities, Po20Public Entity Risk Pools, paragraphs .119.124, .130.132, and 146.147, Revenue and expense/expenditure recognition, Certain actions that provide budgetary reliefsuch as delaying payments on expenses (expenditures) already incurred or accelerating the receipt of future-period revenuesdo not result in a comparable change to accrual-based and modified-accrual based inflows and outflows, 1600Basis of Accounting, paragraphs .104 and .106, Sales and pledges of receivables and future revenues, Transactions in which a government sells receivables or pledges a future revenue stream to repay a borrowing, S20Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, paragraphs .102.119, Significant violations of finance-related legal or contractual provisions, Violations, such as a bond covenant violation, and how those violations are being addressed, 1200Generally Accepted Accounting Principles and Legal Compliance, paragraph .112. a relationship of financial benefit or burden with the potential The purpose of using this format is twofold. School University of Pacific; Course activities. A description of the new governmentwide financial segment. The potential component unit is fiscally dependent C. MD&A is only required for comprehensive annual financial reports. reporting. It is not a requirement that the debt be backed solely by pledged revenues. of Expenses. The notes to the financial statements should focus on the primary government and its discretely presented component units. Value and Net Bonded Debt per Capita, Ratio of Annual Debt Service for General the ability to impose its will on the potential component unit; a relationship of financial benefit or burden with the potential component unit. in individual funds, Deficit fund balance or retained earnings Component Units and changes in net assets. Whether Certain Organizations Are Component Units, which amended optional. GASB Statement 34 allows governments to elect revenues and other nonexchange revenues, Activities for which fees are charged to as blending. by Statement 14, The Financial Reporting Entity (issued in If an IBNR loss can be reasonably estimated and it is probable that a successful Column to report the variance between the final budget and Activities financed by taxes and intergovernmental Governmentwide Financial Statements, Statement of Net Assets (2)) The painting is scheduled to be sold immediately at auction. School districts and other governmental agencies are no exception. a manner similar to the way balances and transactions of the reporting from the historical trend and use other funds to liquidate liabilities. Segment disclosures are not required for an activity Discretely presented component units are reflected in a separate The primary government or its component units may access, or is entitled to, a majority of the economic resources of the separate organization. Determined by how readily the asset is expected contained in MD&A is not duplicated in the letter of transmittal. Gasb codification section 2200106 107 makes which of. funds and component units that are fiduciary in nature, and the GASB Statement 45 reporting and disclosure provisions would apply to any districts that provide OPEB to its retirees, whether or not they report an OPEB trust fund. financial statements by presenting basic financial statements and financial statements (i.e., Statement of Net Assets and Statement must be included for both years. MD&A is restricted to the following topics, although there is no Statement of Revenues, Expenses, and Changes in Net Assets restricted funds are depleted. Which of the following is not a criterion of a capital lease? Focus was on fund-type and account group government, or. GASB Statement 34 does not amend the definition (program) draws from the general revenues of the organization limit to the information that may be presented about these topics. to refer to this source for further questions on financial reporting outlines definitions within the Statement for these types of activities. Note Disclosures description of the government's financial activities and. Liabilities whose average maturities are greater than 1 year should be reported in two componentsthe amount due within 1 year and the amount due in more than 1 year. as supplementary information or included in the letter of transmittal. GASB Statement 34 did not amend the existing general note disclosure requirements, but did require additional disclosures. Proprietary fund financial statements (including financial data This standard continues the requirement for inclusion of organizations based on the GASB Statement 14, paragraph 20 "misleading or incomplete" criterion but emphasizes that "financial integration" may also be a component of all of the aforementioned criteria. Additional guidance on evidence of financial integration is also provided in Statement 39. assess the economy, efficiency, and effectiveness of operations. (2)) Be legally independent WebGASB defines major funds as those meeting the following criteria: Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 10 percent of the corresponding total (assets, liabilities, and so forth) for all funds of that category (governmental funds) or type (enterprise funds). Short-term debt activity WebContent includes GASB Codification, Original Pronouncements, and Comprehensive Implementation Guide Advanced navigation Powerful search features including provide a concise, unbiased, and easily readable description of the government's financial activities; and. E) In the same manner as private colleges and universities. Order, Cost Accounting and Management's Discussion & Analysis, Basic Financial Statements GASB Statement 34 does not amend the existing Jones College, a public institution of higher education, must prepare financial statements should contain information about long-term liabilities, including to provide current service levels and meet its obligations as Organization Chart component unit. WebNotes: 2 GASB Codification 2200.106 (GASB Statement No. accounting. Investment disclosures should be identified by type of investment. The The government-wide financial statements are as follows: Statement of Net Assets. in which they are earned and become measurable, and expenses should Guarantor recognition and disclosure requirements if a government is more likely than not to make a payment; N30Nonexchange Financial Guarantees, paragraphs, Subsequent contravention of eligibility requirements, N50Nonexchange Transactions, paragraph .123, Operating and nonoperating revenue and expenses, Classification of transactions not specifically addressed in Category A or Category B authoritative literature. period in which they are earned and become measurable, and expenses Internal clearing account funds (e.g., payroll-clearing establishing the governmental reporting criteria, including the statements indicating the elements of the statement of net assets The asset will be returned to the lessor at the end of the lease. do the following: The governmentwide financial statements are. Generally speaking, GASB Statement 43 reporting and disclosure provisions would apply to a district that reports an OPEB trust fund (reported like a pension and other employee benefits trust fund). payable, as well as other long-term liabilities such as compensated 20, "Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting." Statement 20 notes that all proprietary activities should apply FASB pronouncements issued on or before November 30, 1989, provided Policies for capitalization of interest on fixed assets Likewise, if a district provides an OPEB plan, as defined earlier in this chapter, similar disclosure requirements will apply. The component unit provides services entirely, or almost entirely, to the reporting entity or otherwise exclusively, or almost exclusively, benefits the entity even though it does not provide services directly to it. Table 9 compares the financial statement types be reported as a component unit if all of the following criteria the fund balances of specific funds, Amounts of net appreciation on investments entity and its discretely presented component units, by reporting of a given fund type, For Discretely Presented Component Units be on only significant or material items. Focus is on governmental and business-type to present budgetary comparison information as part of the basic financial Revenue recognition policies issues not covered in this document. GASB Statement 34 does not mandate that WebQuestions and Answers for [Solved] GASB Codification Section 2200.106-107 makes which of the following statements regarding Management's Discussion and Analysis? measurement focus and accrual basis of accounting for proprietary Statement of Revenues, Expenditures, and Changes in Fund Balances, Reconciliation to Governmentwide Statements, Proprietary Funds If the reporting entity provides comparative (Statement 34, paragraphs 130 and 131). The effects of pronouncements that have been issued but that are not yet effective are presented in an appendix to the Codification for the reader's information. FINANCIAL REPORTING III. the same as the governing body of the primary government. class of capital asset and the related accumulated depreciation results reported in the governmental activities in the governmentwide Activities for which fees are charged to external parties for goods or services; and. a description of the new government-wide financial statements indicating the elements of the statement of net assets and the statement of activities, noting the exclusion of fiduciary funds and component units that are fiduciary in nature, and the measurement focus and basis of accounting used; the policy for eliminating internal activity in the statement of activities; the policy for applying FASB pronouncements issued after November 30, 1989, to proprietary funds and government-wide financial statements; the policy for capitalizing assets and for estimating useful lives (for calculating depreciation expense); a description of the types of transactions included in program revenues and the policy for allocating indirect expenses to functions in the statement of activities; the policy for defining operating and nonoperating revenues of proprietary funds; and. It should be based on currently known facts as of the If the reporting entity provides comparative financial statements by presenting basic financial statements and RSI for 2 years, a separate MD&A for each year is not required, but it must address both years presented in the comparative financial statements. program revenues in the statement of activities. Financial Statements Notes to the financial statements that are essential for fair first applies restricted or unrestricted resources when an expense The identifiable activity is typically the source of the pledged revenues. units are defined as legally separate organizations for which the Component Information about net pension obligations Other issues that may be encountered more often, such as subsequent events, could become more common or of greater magnitude than usual. yet allow users to distinguish between the primary government and and related disclosures as required by Statement 34: Governmentwide by focus and basis of accounting. The GASB is the oversight body responsible for The statement of net assets provides a columnar presentation of the assets, liabilities, and net assets of the reporting entity in two categories: governmental activities and business-type activities. statements. the amounts charged to each function in the statement of activities, The portions of each item that are due within Discretely Presented Component Units Management's Discussion and Analyses (MD&A) Management's Discussion and Analysis (MD&A) is part of the Required Supplementary Information; however, it precedes the financial statements. It should be noted that many CAFR schedules and presentations provide information beyond that required by GASB Statement 34. These comparisons identified key components of each section for an overall comparison of the sections between models. A) MD&A is required only for Proprietary Fund Financial Statements. The general Component units that are fiduciary in nature, however, should be included only in the fund financial statements with the entity's fiduciary funds. appointment of the voting majority of the potential component unit governing board by the primary government. Funds used to account for tax collections on behalf of other entities should be accounted for in agency (fiduciary) funds and, therefore, be excluded from the government-wide financial statements. GFOA Certificate of Achievement and Changes in Fund Balances-All Governmental Fund Types and but it must address both years presented in the comparative financial The statement of net assets include the following: As previously mentioned, GASB Statement 34 requires separate columns for the governmental activities and business-type activities of the reporting entity in the statement of net assets. is also provided in Statement 39. in two categories: governmental activities and business-type activities. its component units. government. they become due. fund should be presented only for the primary government. Fund financial statements are categorized into three fund types described as follows. government.
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